I love the end of the year.
Beyond the holidays and all the food and family gatherings this entails, I find it a great time for reflection and renewal. And it’s safe to say that, for those in the automotive industry, there is plenty to reflect on.
So I thought I would share, in no particular order, some of the things that I find myself thinking about as the first real snow of the season drifts down in my backyard and I look ahead at the things dealers need to address going forward. Here are three that are top-of-mind:
Dealers and their staff need to become EV-native.
Simple to say. Hard to achieve.
I’m not just talking about becoming fluent with the vehicle itself and the basics of range, charge times, and the like. It goes way beyond that. Customers will need help with much more than just the product. What should they think about when it comes to the residual value of EVs? The outlook for residual values of their current ICE vehicles? Guidance on charger installation at home, including recommendations for local providers? Awareness of charging networks? The list goes on. It doesn’t need to happen overnight, but we do need to get rolling.
We need to eliminate the digital chaos.
By digital chaos, I mean the huge number of different software tools that do or don’t integrate well with one another. OEMs are reluctant to dictate the tool set, choosing instead to have short lists of recommended options for DMS, CRM, website platforms, and other elements
of the dealership technology stack. But even three options across five or six different software categories means digital chaos.
As we mentioned before and will speak of again, customers are going to increasingly expect a “know me” experience. Think Amazon. Customers will expect a seamless omni-channel experience. Think Apple. Our industry knows this, but it will be very difficult to create on top of a fragmented and varied basket of technology.
In my mind, the risk for franchised dealers and their brands comes from the direct-to-consumer (DTC) brands (Genesis, Tesla (soon-to-be Rivian), Lucid, Vinfast, etc.). These new DTC players are starting from a fully integrated tech stack. This gives them a huge advantage in creating a “know me” customer experience. This needs to be addressed by brands and their dealer networks, franchised or not.
There will be tremendous opportunities for new products alongside these new vehicles.
Servicing EVs is going to take expensive equipment and lots of training. This will pose a real challenge for the local independent garage. And while they will continue to have ICE vehicles to service for many years to come, there may be a great opportunity for dealers to provide a white label EV service for these garages. Time to brush off that favourite consultant’s term: co-opetition.
The value and complexity of EV batteries will create a host of new F&I product opportunities. Things like battery protection, extended service contracts, battery maintenance plans, guaranteed asset protection policies, and more.
Dealers will need to work hand-in-hand with their brands to help build these new product strategies, but there’s no question there will be new opportunities.
A final thought
I went to the cinema last night, and almost every advertisement shown before the main feature was a car ad—and virtually every one of those was for EVs. Some were for specific models. One brand was advertising the breadth of their EV lineup.
The one ICE advertisement showed how profoundly the EV paradigm is shifting things: the ad highlighted the range of the SUV!
Not the fuel economy. The range (of the vehicle on a full tank of gas). This is remarkable. I think it shows they recognize where their competition will be coming from in the near future.
So while we consider these things, I wish everyone a happy, healthy, and engaging holiday season.
